Archive for May 2014

A bad first quarter and still a 1.3% increase in home prices is a good sign for our the housing market. If the growth rate stays about the same for the rest of the year it will be great for the economy. For a more detailed look at this subject – please read the article below.

Despite disappointing home sales in the first quarter of the year as winter storms took their toll, home prices increased 1.3 percent over the first three months of the year on a seasonally-adjusted basis for the purchase-only market, according to the Federal Housing Finance Agency (FHFA).

“Although the first quarter saw relatively weak real estate transaction activity—in part due to seasonal factors—home prices continued to push higher in the first quarter,” said Andrew Leventis, principal economist for FHFA, with the release of the agency’s House Price Index.

Leventis cites the “modest inventories of homes available for sale” as a major factor in the first-quarter increase.

While the rose 1.3 percent over the quarter, first-quarter prices were 6.6 percent higher than prices recorded in the first quarter of last year, according to FHFA. This compares to just 0.8 percent growth in the price of other goods and services.

When adjusted for inflation, first-quarter home prices are 5.7 percent higher than they were one year ago.

Home prices rose in 42 states and the District of Columbia over the first quarter of the year.

On an annual basis, only one state posted a price decline over the year in March—Vermont, with a 1.24 percent decline.

This new tactic by some of the major mortgage lenders seems like outright coercion and intimidation. It is just one more example of how much these institutions think they above rules or regulations. For a more detailed look at this subject – please read the article below.

A curious piece of text is appearing in some homeowner’s loan modification agreements—by accepting a modification from the bank or non-bank servicer, the homeowner agrees to never publicly say, write, or post anything negative about the company doing the modification.

As originally reported by Reuters, Ocwen, Bank of America, and PNC Financial Services Group are adding new terms to their modification contracts to prevent homeowners from publicly disparaging the companies as part of a mortgage modification agreement.

Essentially, the gag orders are being used when distressed homeowners use litigation to resolve foreclosure and loan modification cases, making the modification contingent upon a homeowner’s silence. The deal often extends to lawyers handling litigious cases on behalf of the injured parties.

Reuters cited, “A 2013 report by the National Consumer Law Center found that servicers routinely lost borrowers’ paperwork, inaccurately input information, failed to send important letters to the correct address—or sometimes just didn’t send them at all.”

“These clauses can hurt borrowers who later have problems with their mortgage collector by preventing them from complaining publicly about their difficulties or suing, lawyers said. If a collector, known as a servicer, makes an error, getting everything fixed can be a nightmare without litigation or public outcry,” Reuters noted.

This is what should be expected in today’s market. A small but consistence uptick in home prices, nationally, is good for the market and also good for the inflation rate. For a more detailed look at this subject – please read the article below.

Home prices continued to ascend through the end of the first quarter, though increases slowed down to match other weak indicators.

The S&P/Case-Shiller Home Price Indices, released Tuesday, recorded a seasonally adjusted 1.2 percent monthly rise in prices across 20 of the country’s top markets. Removing adjustments, the index climbed 0.9 percent month-over-month.

A consensus forecast from economists surveyed by Econoday called for an adjusted monthly increase of 0.7 percent.

Compared to a year ago, March prices were up 12.4 percent, a step back from the 12.9 percent annual increase recorded in February.

“The year-over-year changes suggest that prices are rising more slowly,” said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “Annual price increases for the two Composites have slowed in the last four months and 13 cities saw annual price changes moderate in March.”

Despite decelerating price growth, all cities in the composite index posted higher prices than a year ago, and four locations—Boston, Charlotte, Portland, and San Francisco—are now within 15 percent of their previous peaks. Denver and Dallas, which recovered to their perspective peaks months ago, continue to push up, meanwhile.

This seems to be a case of business as usual in the real estate game. Distressed properties are a strong influence on the existing market and they will continue to be so into the foreseeable future. For more details please read the article below.

Despite a lackluster spring that went against analysts’ projections, CoreLogic reported in its latest Home Price Index (HPI) that home prices, including distressed and non-distressed sales, still rose from February to March by 1.4 percent.

Without distressed sales, the HPI still reflected positive gains for the month, up 0.9 percent month-over-month.

Yearly, home prices rose by 11.1 percent from March 2013 to March 2014. Excluding distressed sales, the yearly gain is slightly less at 9.5 percent.

“March data on new and existing home sales was weaker than expected and is a cause for concern as we enter the spring buying season. Interest rate-disenfranchised potential sellers are adding to the existing shadow inventory, while buyers who can’t find what they want to buy are on the sidelines creating a new kind of ‘shadow demand,'” said Dr. Mark Fleming, chief economist at CoreLogic.

“This supply and demand imbalance continues to drive home prices higher, even though transaction volumes are lower than expected,” Fleming said.

Moving forward, CoreLogic’s HPI suggests that home prices will continue to rise, growing 6.7 percent by March 2015. CoreLogic’s analysis of March also projects that home prices will continue to grow monthly, increasing 0.8 percent in April (including distressed sales).

The share of all-cash sales reached a new high in the first quarter of 2014, even as the total share of institutional investor purchases dropped to near-record lows. All-cash sales made up 42.7 percent of all U.S. residential property sales for Q1, up from 37.8 percent from the previous quarter, according to RealtyTrac’s U.S. Institutional Investor and Cash Sales Report.

All-cash sales increased yearly as well, up from 19.1 percent of all sales in Q1 2013. All-cash sales are the highest they have been since RealtyTrac began tracking this data in 2011.

“Strict lending standards combined with low inventory continue to give the advantage to investors and other cash buyers in this housing market,” said Daren Blomquist, VP at RealtyTrac. “The good news is that as institutional investors pull back their purchasing in many markets across the country, there is still strong demand from other cash buyers—including individual investors, second-home buyers and even owner-occupant buyers—to fill the vacuum of demand left by institutional investors.”

15 percent of all-cash purchases were for foreclosures, with 10 percent for REO properties. The average sales price of an all-cash purchase, $207,668, was 13 percent below the average estimated full market value of $237,900.

While all-cash purchases were soaring to new heights to start the year, total investor purchases dropped to the lowest level seen since Q1 2012.

5.6 percent of all U.S. residential sales in Q1 2014 were from institutional investors, which RealtyTrac notates as a non-lending entity that purchases at least 10 properties in the past 12 months.

This is interesting because no mention of this has been forthcoming from the major news outlets. This is not just a case of one bureaucrat calling each other names. This is a major official claiming he was going to shoot his fellow official.

A top official for the Federal Housing Finance Agency (FHFA) is looking at a felony charge for allegedly threatening the agency’s former acting director, Edward DeMarco.

According to a case summary from the District of Columbia Courts website, Richard Hornsby, FHFA’s COO, was charged in late April with “[threatening] to kidnap or injure a person,” resulting in an order for him to stay away from DeMarco. He has also reportedly been directed to keep away from the agency, according to the Wall Street Journal, which first broke the story.

The next hearing for the case is scheduled May 14.

Citing police and court records, the Journal reports: “Mr. Hornsby allegedly threatened to shoot Mr. DeMarco after making ‘increasing threatening comments’ about him over the course of several weeks … FHFA officials notified the agency’s inspector general about the threats on April 28, after an incident in which Mr. DeMarco was ‘escorted to a secure location following a report of a threat.'”

The Journal report goes on to say that employees were notified following the incident that Hornsby had been placed on leave and will (be) replaced for the time being by Eric Stein, a former Treasury official brought on as a special adviser to FHFA Director Mel Watt earlier this year.

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